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The New Republic’s Jonathan Cohn on Obamacare

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HH: It’s Hugh Hewitt playing all of the Who’s Next album for my bump music since I had to suffer through the worst classic rock music [play-list] ever through a long MRI today, probably a MRI I’d be denied by the death panels which will kick in next year, so my next guest Jonathan Cohn who is a wonderful writer at the New Republic denies that death panels exist. Jonathan, do you think I’ll be able to get bad Pandora music in my MRI’s next year?

JC: I sadly think you’ll be able to get bad Pandora music in everywhere next.

HH: [laughing].

JC: I like your music taste of the Who. Very nice. I’m a big fan.

HH: No, it was, actually they said do you want to listen to classic rock it gets very noisy in the machine. I’ve got a back issue. I said “Sure,” and I recognized nothing and so I’m doing this to educate Pandora as to what really classic rock is.

Jonathan on August 12th you wrote the following over, at your very fine set of analysis on Obamacare that as readers of this base know:

Obamacare will unleash several changes on the part of the insurance market. Some, like regulations requiring insurers to cover “essential benefits,” will tend to make insurance more expensive. Others, like tax credits for people with incomes of less than four times the poverty line, will tend to make insurance less expensive.

The effects will vary enormously depending on who you are, what policy you choose, and where you live. And while some people will pay less than they pay today, some will pay more. They will primarily be young, healthy men who benefited from preferential pricing in the past, were content with coverage that had huge gaps, and are too wealthy to qualify for the law’s tax credits—which are substantial but phase out at higher incomes. Exactly how many people fall into this category remains the subject of controversy. But the experts I trust most think that a minority of people getting coverage through the exchanges will end up paying more than they are for coverage now. (That’s not including the many people who have no insurance at all right now.)

Is that your kind of overarching summary, some winners, some losers, we won’t know who they are for a couple of years?

JC: Yes, with the caveat and this is where there’s to be fair there is some argument about this but, you know, to postscript that, although one of them was in there ,which is I think the winners outnumber the losers by quite a lot, not particularly true again if you start to include people who have no insurance and are getting insurance so that’s number one. Number two, when we talk about the winners and losers, were talking here about how much people will pay for insurance next year versus what they are paying this year. When we say that, this conversation you and I are having, and this conversation people are listening to about rate shock, I always remind people that’s, we’re talking about small part of the American population. We’re talking about people who are going to buy insurance on their own. So, if you get insurance from an employer or you’re on Medicare, this doesn’t apply to you. This isn’t about you. There’s other stuff about you, but this debate here bout who’s paying who’s insurance rates are varying, that’s who we are talking about.  And the last point that I’d made and, I think again depending on who you talk to you, conservatives would disagree with me on this, but I would say even when people who are paying more are getting something for their money that is very worth while and, obviously, people can differ on that. But in general, that’s the overview.

HH: Okay, let me talk to you about a person who is clearly not better off and that’s the person that my law firm is not hiring to replace our receptionist who quit to take a different job somewhere else and we have about 20 lawyers and support staff sort of people. It’s a small law firm, very successful, but our receptionist left and we decided, as many businesses are, you know what, we’re not just not going to hire a receptionist until we figure out what’s going on with our health care insurance because the cost went up significantly this year and we’re going to save that money so we’re just not going to hire. Now the income of that job is is between Thirty and Forty thousand dollars a year. It’s not by any means a great job. It’s good entry level skills job. The person who left moved up, learned some skills over three years. We’re just not doing that and the Unions wrote the President a letter saying lots of businesses are going down. I think it’s below 30 hours, it might be below 35 hours, and we’ve got to get rid of this thing. So the second order impacts of Obamacare are enormous. Are you counting those people and the consequences of your assessment of Obamacare?

JC: Yeah, so I mean look, I’m obviously not at your firm, I can’t speak to what decisions your firm in particular is making or why. I will tell you that in general based on everything that I seen, based on the data, and if you asked economists who are crunching these numbers for a living, they will tell you there is virtually no evidence that Obamacare is effecting hiring you know in a big way, one way or the other. You know, the economy is proceeding on a slow recovery, slower than I would like, slower I’m sure than you would like, and that is because of some big forces out there and big things that are gong on and if we got into a discussion about that, I’m sure you and I would disagree about what’s going on and why.  But, you know, that back to the hiring and stuff, the healthcare piece that is very small for the most part. Now, that’s what the data shows. Does that mean that on a sort of you can’t find cases where there are decisions being made one way or the another because of the healthcare law? I’m sure they are.

HH: Yeah, but you’re familiar with the letter the union leaders sent, correct?

JC: Right, so now we have two different things going on with the Unions. One has to do with a particular type of health plan that some Unions run and they are unhappy about the fact that the law is not giving those plans the treatment that they wish it would. This is a weird issue in part because, I think, if you talk to almost any person who really understands health policy, they would tell you that what the Unions want is basically a special favor. They want special treatment and basically the Administration is saying that we’re not going to do it. I know you want it. It would be good for these Union plans, but it really doesn’t make sense for a number of reasons which I’m not going to bore your readers.

HH: Yeah, but here’s—I read, I really do read your stuff at the New Republic.

JC: Yeah.

HH: Of course, you try and be fair and it strikes me as, I don’t know if you know about the Tule fog on the 5 in California sometimes its so dense they have these 100-200 car pileups and they just get worse and worse and worse

JC: Yeah, sure.

HH: And you’re like the reporter from the local station whose covering the Tule fog train wreck and you find the biker who went by side streets to get to work and you say, look this biker got to work fine this morning and you’re ignoring like this massive pileup. You’ve got the Unions; you got the Ohio exchange rates going up 41 percent. You have a couple of insurers, significant insurers leaving the California market completely. You’ve got macro antidotes. You’ve got micro antidotes like my law firm, but Jonathan Cohn believes man, you just believe. I don’t know what it’s going to take for you to see that this is just a regulatory nightmare. They’ve got all the postponements; we have another set of postponements. You’ve got an answer to that. Did you expect to have to be writing, revising the defense of Obamacare on a almost 24-7 basis?

JC: [laughing] Well, I will say it’s been, it’s been keeping me busy certainly. You know, with due respect, I would actually flip that around and say, the way I see it, and I’m being honest here, like you say I try and be very honest and straight about the facts, is that I feel like the media is the one that’s constantly reporting, you know, if I can, you know, I can take and kind of turn your analogy a little bit here. You know, there’s a freeway right? And people are getting there and it’s working more less like the way we wanted it to and, you know, there are some cars breaking down along the sides here and there’s a pot hole here and then we’re going to have a little detour along here, and the media reports are basically oh, my God, look at the detour. Oh, my God, look at this pot hole. Oh my God, someone’s car, you know, stalled. But actually we just built this road and it’s getting most people where they want to go and it’s gong to work fine. My analogy is wrong and imperfect in about 10 different ways because I made it up in the last 10 seconds, but, you know, I feel like, someone who I hope I’ve always been straight forward from day one. I was actually the other day looking back at the story I wrote just for random reasons the day the law passed, and I was happy to see that among other things, I was very upfront back then when I said, look this is a law that is the result of a lot of compromises. It’s going to take awhile to implement it and this is before we understood that there was going to be such intense political resistance.

HH: Stick with me through the break. I’ll be right back with Jonathan Chon, primary Obamacare defender at the New Republic. Stay with me, it’s the Hugh Hewitt Show.


HH: Remember, America, visit to join in drafting Mark Steyn. Why not the funniest, that’s my slogan for Mark and the 17th Amendment allows him to run in my view. Jonathan Cohn of the New Republic is my guest. Jonathan, I quote from the Cleveland Plain Dealer, Natalie Villacorta, August 1st this year: “Ohio Insurance Regulators Thursday released rates for health insurance to be sold on the new state marketplace and said premiums for individuals will rise an average of 41 percent compared with 2013 rates.” Your reaction?

JC: So actually this is a perfect example of what I’m talking about. I actually remember that story very well. I wrote about that story. So, you know, as you mentioned in the earlier segment, the way Obamacare works, and people need to understand this, is that it’s sort of making all these changes to the insurance market. Again, for people buying on their own, we’re not talking about employers, employer insurance so this is one-fifth of the market that people buying on their own. I own my own business, or I don’t have an employer but it doesn’t give me insurance and is making all these changes, right? On the one hand we’re saying look, the insurance has to cover all benefits, can’t not just it can’t not, not cover, you can buy a policy today, it doesn’t cover prescriptions. Well, that’s not going to do you a lot of good. So, alright every insurance policy has to cover everything, every covered service, and by the way, you can’t leave out the sick people. You can’t say oh you’re sick, we’re not going to give you insurance, or you’re sick so we’re going to charge you five times as much. You can’t do that anymore. Now, if you do that, if we change the insurance market, it’s going to make insurance more expensive and, you know, what we’re getting now, this sort of information on how much more expensive, and the announcement that the Ohio people made was that’s what they told you. When they said 40 percent, they said that the average across everywhere is going to be 40 percent higher. Now, like all averages [inaudible] a lot of variations, some more than others, but you know, 40 percent higher. But they kind of left out something which is sort of important which is that’s only half the story, because Obamacare also comes in and says, hey, we know we know we’re making this more expensive, but we’re also doing a lot of stuff to make it less expensive and by far, from the standpoint of the consumer, the most important part of that is, we’re giving you tax credits. We’re giving you subsidies and when we say a tax credit, I don’t mean, you know, you pay for your insurance and then at the end of the year you file a tax return and you get, you know, some money knocked off your taxes. I mean it’s a discount so the day you buy that insurance policy, you enter in your income, you go on the website, you buy it and it says, well what’s your income? And let’s say I’m making, a family of four, I’m making $45,000 a year. So, you know, above the poverty line, but, you know, still very middle class. You know, working hard, struggling to pay my bills, you know, that price is going to come way, way down. It’s going to get discounted by thousands of dollars and the Ohio people didn’t tell you that part.

HH: No, they didn’t, but would you agree it is a huge transfer of wealth that was not really articulated at the time of the debate from people who are already paying the vast amount of the tax bill in America to the people who are not. Is it not a huge transfer of wealth?

JC: So, I would say it is a transfer, yes. I would call it transfer of income not wealth, but whatever you want to call it. Look, here’s where the money is coming and here’s where it’s going. I think that’s actually a really good way to put it. So where does the money come from? Where does Obamacare get its money? Well, it gets part of it from a tax on the very wealthy which is what you were just mentioning, right? It’s a surcharge on, I forget if its $250,000 or $500,000 or whatever, but it’s a income tax surcharge only on the very, very richest Americans so that’s one pot of money it takes. Some of the money it takes from insurers, the insurance industry, the insurers who cover Medicare benefits right now. They’re saying that we’re not going to pay you quite as much as we did because we realize we think we were paying you too much. And it’s also going to spend less money paying doctors and hospitals and all the people who supply stuff and pharmaceutical companies who supply to Medicare. Now, we talked about that before, and there people who argue and you can argue that those are actually gonna hurt Medicare, I don’t think they will, but that is a separate debate. But that’s where that money is coming from. Now, all that money is coming out, is going right back out, most of it, some of it goes to reduce the deficit. But most of it is coming back out either to get people on public insurance programs like Medicaid or to help middle class people buy private insurance. You know, that’s what it is. Is that a transfer? Yes.

HH: Of course it is.

JC: I’m pretty comfortable—

HH: I’m not sure that Americans knew that when they got it. They are going to know it now, but I’m going to keep you one more segment and we’re going to juggle a little bit. Don’t worry, we’ve go the time. We’ll figure it out, Adam. I’m looking at my producer who is upset with me.

JC: [laughing]

HH: Just call him and tell him we’re running a little bit late because I’ve got to take you one more segment. But many, many of the young men, many, many of the young men whom you [inaudible] in your article are going to pay more. There simply going to make a rational economic calculation, aren’t they, Jonathan Cohn, to pay the tax which is their option? There’s, it’s just economically common sense for them and as a result we’re going to end up with vast numbers of people who aren’t insured. A vast amount of transfer, vast hikes for those who are insured, vast employment paralysis, vast Union disconnects, vast numbers of problems that we cannot foresee and, I might add, in doctor shortages. These are all real. You don’t deny. That’s what I like about reading it. You don’t deny. These things are out there. When we come back, I just want to talk with you for six or seven minutes about what might have been done or still could be done as an alternative to this train wreck that is Obamacare. Jonathan Cohn, one of the articulate defenders of that which cannot be either defended articulate or otherwise, Obamacare, is my guest from the New Republic. Follow him on Twitter @citizencohn. I do.


HH: It’s Hugh Hewitt, celebrating the finest rock record ever made, Who’s Next, the Who’s album with Jonathan Cohn probably could steal from his father’s record collection. I’m not sure. Is that right, Jonathan?

JC: No, I’m not that young. I mean, well, I guess sort of kind of.

HH: Yeah, come on, admit it.

JC: I like the music though. I’m digging the breaks, man. This is a good soundtrack.

HH: Are you a Game of Thrones aficionado?

JC: You know, I resisted it and finally started watching.

HH Oh you have because Cillizza and Tapper and the rest of you people have all fallen prey to those of us who read the books years ago, and then let me ask you as well, are you a Friday Night Lights follower?

JC: You know, that one is not one I’ve gotten into, but people recommend it so maybe I should.

HH: Maybe you should try that. Okay, here’s my proposition. In 2009 the President passed a stimulus of 787 billion dollars, correct?

JC: Last time I checked, yeah.

HH: Okay. If we

JC Some dispute about the exact number, but I

HH: I’m using the low cause I’m always conservative. I’m using the low number, not the 850 billion that some people say. I’m saying 787 billion. Let’s say of that 787 billion the President had said, we’re going to spend 287 billion on shovel ready projects, whatever Joe Biden says they are, and we’re going to take 500 billion of that and we are going to identify the 500 largest cities in America, and we’re going to give them each a billion dollars, with a minimum of one or two per state so we don’t ignore Montana and Wyoming, that don’t really have any large metropolises, but the 500 largest cities are going to get a billion each, and the City Council is going to be told that from that billion that they are going to build, endow and staff community clinics with free healthcare, free primary care for indigent and the near indigent. Would the United States have more healthy poor people today than they do if we had gone down that road?

JC: Well, I’m trying to re-I’m trying to make sure that I follow your hypothetical here. So, instead of, so in other words if they had taken the Recovery Act money and put that into building clinics?

HH: Into building a healthcare system, a public healthcare system for the indigent and the near indigent that provided actually primary care, some modest surgery,

JC: Right

HH: the kind of preventative care we all want and need, because I’ve sat for 15 years on something they call the [Orange County] Prop 10 Commission, which gives the cigarette tax money away, about 40 million dollars a year. We put most of that into primary care, most of that goes to communities that do not have access or healthcare homes and all that kind of thing because we need, there’s this enormous gap. If we had spent that 500 billion dollars, a billion dollars in a city as an endowment throws off between 50-70 million dollars a year in income after your, you can buy three or four clinics, you can staff ‘em, you can provide ‘em. If we had done that, we’d actually have a whole lot more healthcare right now in the United States for poor and near poor than we do under this, this jerry-rigged system we call Obamacare. Wouldn’t that have been a better choice?

JC: Well, you know, without in anyway saying I would not have been approved of spending that money on clinics and I still would if you want you want to put 500 billion dollars up for building clinics and staffing them and that’s great, and the Affordable Care Act does put a lot of money into community clinics. And, I think, I don’t know how much time you’ve spent in those clinics.

HH: I have a lot.

JC: You know what, I have too. You know, some of those clinics they do great work.

HH: They do, they do what we want done.

JC: They sure do. They sure do.

HH: Here’s my question:

JC: And you know what? These clinics love the Affordable Care Act.

HH: Well, they do because there is sign of funding for them, but I’m proposing an alternative. If I said to you, Jonathan Cohn, I’ll give you the 500 billion if you repeal Obamacare. Let’s go down there together and give 500 cities a billion dollars to establish a community health system that’s free, that is staffed, that is endowed, that it is not—we’ll just get the federal government—if you will repeal Obamacare. Would you take that deal?

JC: Well, no, because

HH: [sigh], Jonathan

JC: I, I wouldn’t because we would still have all these unfin—we’d be back at square one with the insurance

HH: No one would be uninsured if you have primary care and the major

JC: I mean if you want talk if you actually want to have a serious conversation about going away from an insurance system all together and setting up clinics

HH: For the, for the indigent, not the—I just want to take care of the poor people who don’t have health care that’s what this is really about.

JC: Right, but now remember, who we’re talking about, you know, again, nothing, I love these clinics. I’ve spent a lot of time in them. They do great work and you and I can go out and talk about how great they are. We can do a series and plead public money, private money, great I don’t want anybody to get the wrong impression about what I’m about to say, but that’s going to solve the problem. We got a lot of people without insurance. I’m that poor. Now, you want to set up a system where basically clinics or how not just the poor but the middle class, cause a lot of middle class uninsured people, how they’re going to get insurance. You know, that’s how they’re going to get their healthcare. Let’s have that conversation and, you know, maybe I got to tell you, just this little conversation that we’re having here right now about you putting that money on the table and let’s do, you know, a 500 billion dollar clinics plan instead of 500 billion dollars for Obamacare plan, you know, if that’s what you’re talking about. You know, that’s more constructive than what the Republicans are talking about. People want to repeal it because they don’t even do that, right? I mean, they can’t even get their act together to do 30 billion dollars to sort of set up a kind of

HH: There is no sense right now, and the reason is Obamacare is a cancer on the country. I really believe this, Jonathan. It will destroy the economy of the United States. I know what some of the good faith people wanted to get done and I would like to offer them that, the actual delivery of medical care to the indigent, the near indigent or even the lower middle class, which can be done via community clinics and the old public health system model, but that’s not what a lot of Left wanted. A lot of the Left wanted social control. They want single payer. They view this as destruction of the system that will allow it to happen. And they aren’t making that offer. They won’t entertain it. You didn’t entertain it without any proviso, because you want the control over everybody. You don’t want healthcare for indigent people. You want the control.

JC: No, no, no. You really think that I’m in this for control? I mean, you know who I mean, you know what I’ve spent my life doing.

HH: I mean the Left thinks the only way it can get what it wants, whatever that is Utopia, is to control everyone’s insurance and ignore the primary need which is the safety net, so you’re going to get neither.

JC: I really, really don’t think that is true. I mean, look you may disagree with the way the Left wants it and remember the Left there’s Liberals, there’s people in between so I mean, you know, there are people, there are people out there who they think, you know, single payer is the only way they would do it and anything short of that is wrong. I’m someone who actually, I like single payer systems. I think they work pretty well from what I’ve seen abroad, but I’m also somebody who, as you know, thinks there’s other ways to do it and I’ll take what you can get in order to get people insurance. You know, the people who believe in this who are fine with this and I’ll tell you certainly at the White House, because believe me, I’m to the Left of the White House. [laughing inaudible] much more willing to compromise in this stuff than I would like. You know, this is about making sure people can get healthcare, making sure not just the poor but the middle class has the security of knowing that no matter what their job status, no matter if they get sick, that they are protected against medical bills and it’s about trying to put in place a system so that over time we can so slow healthcare spending, slow it down so it’s not taking so much—now you may think it’s wrong and I think it’s right and that’s a separate argument, but if we’re going to talk about motives, please let’s at least give them that.

HH: I’m not giving them that. I’m, I won’t. Jonathan, I’ll give you that, but I won’t give many of them that. Jonathan Cohn, always a pleasure. Follow him on Twitter @citizencohn. Stay tuned.




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